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business activity Flashcards

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1
Q

define globalisation

A

growing integration of the world’s economies

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2
Q

key features of globalisation

A
  • free trade of goods and services across borders
  • free movement of people between countries
  • free flow of capital investment between countries
  • free exchange pf technology and intellectual property
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3
Q

reasons for globalisation

A
  • technology allowing for faster communication
  • transport is cheaper
  • deregulation(fewer trade barriers and privatisiation)
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4
Q

What is business activity?

A

The process of producing goods and services to satisfy customer needs and wants.

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5
Q

What are the 3 sectors of business activity?

A

Primary (raw materials), Secondary (manufacturing), Tertiary (services).

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6
Q

What is the purpose of business activity?

A

To combine factors of production to produce goods and services.

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7
Q

What are common business objectives?

A

Profit, growth, survival, market share, customer satisfaction, social responsibility.

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8
Q

What is a SMART objective?

A

Specific, Measurable, Achievable, Realistic, Time-bound.

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9
Q

Why do business objectives change over time?

A

Changes in size, market conditions, ownership, or competition.

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10
Q

What is a sole trader?

A

A business owned and controlled by one person.

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11
Q

What is a partnership?

A

A business owned by 2–20 people sharing profits and responsibilities.

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12
Q

What is a franchise?

A

A business where a franchisor allows a franchisee to use its brand and model.

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13
Q

What is a social enterprise?

A

A business with social objectives that reinvests profits into the community.

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14
Q

What is a limited company?

A

A business with legal identity separate from owners, with limited liability.

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15
Q

What are the two types of limited companies?

A

Private limited company (Ltd) and public limited company (Plc).

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16
Q

What is a multinational company?

A

A business that operates in more than one country.

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17
Q

Give one advantage and one disadvantage of a multinational.

A

Advantage: Access to global markets. Disadvantage: Cultural/language barriers.

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18
Q

What is a public corporation?

A

A business owned and operated by the government.

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19
Q

Why are public corporations set up?

A

To provide essential services, ensure accessibility, and protect public interest.

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20
Q

What is one disadvantage of public corporations?

A

Less incentive to be efficient or profitable.

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21
Q

What factors affect the choice of ownership?

A

Size of business, control, need for capital, liability, legal formalities.

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22
Q

Why might a business convert from a sole trader to a Ltd?

A

To access more capital and benefit from limited liability.

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23
Q

What is the private sector?

A

Businesses owned by individuals aiming for profit.

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24
Q

What is the public sector?

A

Government-owned organisations providing essential services.

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25
What are non-profit organisations?
Organisations that aim to benefit society rather than make profit.
26
What factors influence business location?
Cost, proximity to market, labour, transport, competition, availability of raw materials.
27
Why is location important?
It affects costs, customer access, and overall success.
28
Why might a business relocate?
Lower costs, better access to customers, expansion, or favourable government policies.
29
benefits of globalisation
access to larger markets lower cost and economies of scale access to cheaper labour lower tax rates
30
threats of globalisation
increased competition risk of takeovers external shocks
31
contigency plan meaning
planning to deal with threats of globalisation
32
e-commerce growth meaning
the growth of the online world for businesses use to sell world wide
33
MNCs
a multinational corporation that operates in different countries while having its headquarters in one
34
why business become MNCs
advantage - lower economies of scale - marketing power - access to cheap resources - technical + financial powerhouse - larger customer base - tax benefits
35
visible and invisible trade
visible trade = trade of good invisible trade = trade of services
35
benefits and drawbacks of MNCs
benefits - job creation - higher tax revenue - boost in exports - technology transfer - infrastructure investment drawbacks - environmental damage - worker exploitation - economic dependence - tax avoidance
36
balance of trade
difference in visible exports and visible imports
37
benefits of international trade
- cheaper goods - more global goods
38
what do governments spend on?
healthcare education defense infrastructure social security
39
types of taxes
income or corporation tax Vat, sales tax tariffs
40
impacts of tax
- lower income tax = more consumer spending = more sales - higher corporation tax = less investment = less consumer spending - lower Vat = lower prices = more sales
41
effects of the government
- infrastructure = roads or communication - rules = minimum wage or higher interest rates - trade policy = no fake goods + quality control - government investment = transport, energy + digital - competition policy = more small business growth + no monopolies - environment = laws for less pollution + encourages sustainability'
42
reason for wanting less trade
more local jobs more local businesses fairer competition
43
types of trade barriers
- taxes on imports - quotes like limited on imported good - subsides = financial support to domestic firms
44
what happens when interest rates change?
higher = more loans lower = less loans
45
fiscal policy definition
The money reinvested into the country by the government
46
what are external factors
factors that are outside the business control that impacts decisions and performance
47
effect of social media
- reaches global audience - more customer engagement - brand awareness - easier for data collection
48
what is Pestle
Political = laws for business running the country Environmental = effects from the environments like climate change Social = income or lifestyle Technology = how advanced the tech is other 2 do not need to know
49
ways to measure success
- revenue = total income from business - market share = number of sales of a product a company holds - profit = total money earned - costs - customer satisfaction = happy customers = good - growth = num of employees however there is risk of overtrading - stakeholder = stakeholders satisfied = well run - employee satisfaction = in job security, wages or promotion
50
challenges in measuring success
small businesses and large businesses have different needs and different goals
51
reasons for failure
- cash flow problems like overtrading or investing too much in fixed assets - lack of finance - not competitive enough - failure to adapt to market
52
what are ways to afford failure?
- strong financial planning - managing cash flow effectively - staying competitive through innovation - listening to customers and adapting to change
53
what are needs and wants
needs - something that people need wants - something that people want
54
what are consumer goods and services
goods or services that are given to consumers
55
what are producer goods and services
goods or services that are given to businesses
56
what are stakeholders
people who have an interest in the business and sometimes influence business decisions
57
what are financial objectives
a goal that a business wants to achieve based of money, like survival, profit, sales and security
58
what are non-financial objectives
a goal that a business wants to achieve not based on money like social objectives, personal satisfaction and challenges
59
what is limited liability
when a business and the owner has separate legal identities
60
what is unlimited liability
when a business and owner has the same legal identity
61
what is a franchise
when someone uses a brand for a store
62
what is primary market research
research that is found by the business itself
63
what is secondary market research
information that is already there
64
methods of primary market research
- questionairres - consumer panels - focus groups - observations - test marketing - surveys - interviews
65
methods of secondary market research
- market reports - government reports
66
what is market orientation
when a business focuses on satisfying the needs of the market
67
what is product orientation
when a business focuses on making the product
68
market share
the proportion of sales a business has for a product
69
mass marketing
when a business targets lots of people
70
niche marketing
when a business targets a select group of people
71
what is geographic segmentation
market based of location
72
what is demographic segmentation
market based of income, origin, age, gender, religion
73
what is psychographic segmentation
market based of lifestyle
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